400,000 Jobs Have Already Been Lost Because Of The Bane That Is Demonetization

With the recent demonetization of Rs.500 and Rs.1000 notes, temporary jobs, especially in labour intensive sectors like garments, textile, leather and jewellery, have taken quite a hit. A senior industry executive, remaining anonymous, has said that about 4 lakh people, comprising mostly of daily wage workers, have either lost their job or snubbed work temporarily due to lack of payment, and the number will just keep going up if the cash flow doesn’t increase.

However, they added, this estimate is primarily based on anecdotal evidence and a better picture of the situation will appear in the coming weeks.

Engineering Export Promotion Council (EEPC) vice-chairman Ravi Sehgal said that some labourers are refusing direct payment through banks, even though they have bank accounts, fearing that the amount might exceed Rs.50,000 ( a year ) which will cause them to lose their below poverty line status, stripping them of subsidiary benefits.

A lot of export promotion councils warned of lower production in a meeting with commerce and industry minister Nirmala Sitharaman held on Monday.

An industry executive present at the meeting even said that some of the factories had to cut down the production by half since demonetization because of the liquidity crisis.

Out of about 32 million people employed in the garment and textile sector with daily or weekly wages, roughly a fifth of that faced grave consequences. A lot have already lost their jobs and many are worried about facing a similar fate. About 70% of workers in the garment industry, especially in hubs like Tirupur, are migrants from north and northeastern parts of the country and do not have a savings bank account.

Facing a similar problem, about 20-25% of the 2.5 lakh daily wage workers in the leather industry are also affected. Since 90% of the industry is made up of small and medium enterprises, it has been hit the worst. About 15-20% of the daily wage workers in the jewellery sector have been affected as well.